Election Stock Market
Election stock markets (also referred to as election prediction markets) are financial markets in which the ultimate values of the contracts being traded are based on the outcome of elections. Participants invest their own funds, buy and sell listed contracts, earn profits and bear the risk of losing money. Election stock markets function like other futures exchanges, such as commodity exchanges for the future delivery of grain, livestock, or precious metals.
The main purpose of an election stock market is to predict the election outcome, such as the share of the popular vote or share of seats each political party receives in a legislature or parliament. Efficient markets are very good at reflecting all available information, often reflecting information faster than opinion polls, which take several days to complete and process. Traders also have a strong financial incentive to reflect their true opinion about the election outcome regardless of their political preferences.
Election stock markets are also used for research and teaching purposes. Researchers can study trader behavior and market operations. Election stock markets also teach participants the fundamentals of trading, such as how to take a long or a short position. A list of related academic research papers appears below.
Read more about Election Stock Market: Examples of Election Stock Markets, Reliability of Election Stock Markets, Academic Papers, Academic Journals, Popular Articles
Famous quotes containing the words election, stock and/or market:
“Savages cling to a local god of one tribe or town. The broad ethics of Jesus were quickly narrowed to village theologies, which preach an election or favoritism.”
—Ralph Waldo Emerson (1803–1882)
“In the case of our main stock of well-worn predicates, I submit that the judgment of projectibility has derived from the habitual projection, rather than the habitual projection from the judgment of projectibility. The reason why only the right predicates happen so luckily to have become well entrenched is just that the well entrenched predicates have thereby become the right ones.”
—Nelson Goodman (b. 1906)
“It is a sign of our times, conspicuous to the coarsest observer, that many intelligent and religious persons withdraw themselves from the common labors and competitions of the market and the caucus, and betake themselves to a certain solitary and critical way of living, from which no solid fruit has yet appeared to justify their separation.”
—Ralph Waldo Emerson (1803–1882)